Dissertations and Theses from the College of Business Administration

EFFECT OF SOCIAL MEDIA ON CROWDFUNDING PROJECT RESULTS

Alexey Moisseyev — Tue, 23 Apr 2013 07:20:46 PDT

Crowdfunding is a form of collaborative social media. Even though crowdfunding can function without social media, this phenomenon has developed greatly with the advance of social media. The studies in entrepreneurship and finance established connections between startup projects and social ties. However, the impact of social media on crowdfunding is still lightly studied in academic literature.

The purpose of this thesis is to define the influence of social media on crowdfunding. In particular, this research studies the connections between social media assets such as the social media followers and the social media seals of approval and crowdfunding results such as the delivery of the funding target, the fundraising total, and the number of backers.

In course of the research, data on the hundred crowdfunding projects on the Kickstarter site were collected. Collected data established a number of statistically relevant connections, including the connection between the social media seals of approval and the delivery of fundraising target, the connection between the social media seals of approval and the fundraising total, the connection between the social media seals of approval and the number of backers, and also the connection between the number of social media followers and the social media seals of approval.

The value of this research is that it explores the underlying mechanism of social media influence on crowdfunding results and helps individuals and businesses involved in crowdfunding projects identify factors of success and predict results for their projects.

Adviser: James W. Gentry

The Implementation of New Marketing Strategies by the Salesperson: The Constraining Factor Model

Jeffrey S. Johnson — Thu, 28 Mar 2013 08:27:03 PDT

The implementation of marketing strategies has long been espoused as a key concern of academics and practitioners due to its importance to firm performance. Despite this fact, strategic implementation remains a perennial challenge for firms. This may be in part due to the focus placed on strategic formation rather than strategic implementation. Additionally, as the preponderance of empirical explorations into the implementation phenomenon have been conducted at the firm level, significant opportunity remains to understand implementation on an individual level. Of the organization roles germane to strategic implementation, that of the salesperson is arguably one of the most important. The salesperson’s role as an organizational boundary-spanner places them at the front line of implementation with the customer.

The goal of this dissertation is to advance understanding on this important topic by examining the factors impacting the implementation of marketing strategies by the salesperson. In this pursuit, I draw from motivation, opportunity, and ability (MOA) theory to investigate the drivers of the implementation of new marketing strategies by the salesperson. I empirically test hypothesized relationships by conducting a large-scale survey of business-to-business salespeople. My analysis utilizes a constraining factor model, a new-to-marketing approach derived from operations management. I also examine multiple theoretically-supported drivers of the salesperson’s motivation, opportunity, and ability and resolve unanswered questions in the literature. Finally, I test the contingent impact of salesperson implementation.

The findings provide substantive insight regarding what impacts the business-to-business salesperson’s motivation, opportunity, and ability to implement new marketing strategies with support for many of the hypothesized relationships. The constraining factor hypotheses receive mixed support from the data; however, a post hoc analysis examining the MOA interrelationships in a different manner uncovers divergent findings of interest to theory and practice. Finally, the contingent effects hypotheses on implementation success are not supported suggesting the role of environmental conditions on salesperson implementation is less impactful than previously thought.

Advisor: Ravipreet S. Sohi

What Brings You Pleasure? The Role of Desire within the Development of Compulsive Purchasing

Justine Rapp — Thu, 06 Dec 2012 11:19:50 PST

This paper seeks to put forth two major contributions into marketing scholarship: (1) the role of desire within the development of compulsivity from impulsive consumptions, and (2) an assessment of compulsivity measurement scales. A mixed method design provides for both statistical and qualitative support for both contributions, for a deeper and replicated account of consumer behavior within the marketplace. First, we develop a possible path for the development of compulsivity, explaining impulsivity as an antecedent with consumer shopping desire as the driving factor. With this, we introduce the variable Consumer Shopping Desire as a quantified construct related to Belk et al.’s (2003) conceptualization of consumer desire. Further, analysis is provided in seeking the differences in compulsivity measurement through an analysis of both the Faber and O’Guinn (1992) and Ridgway et al. (2008) compulsivity scales. Qualitative in-depth interviews illustrate leniency within the latter scale, as some individuals deemed compulsive fail to exhibit behaviors characteristic of compulsivity within the literature. We conclude with possible directions for the marketing community addressing the fundamental need in identifying at-risk consumers before they proceed to develop compulsive behaviors within the marketplace.

Adviser: James W. Gentry

An Empirical Understanding of the Dialectic Relationship between a Central Governing Body and the Individual Sites in a Multisite Enterprise Resource Planning (ERP) System Implementation

Tedde J. Taege — Wed, 17 Oct 2012 14:00:30 PDT

Multisite enterprise resource planning (ERP) system implementations are a challenge faced by organizations. One of the facets of this challenge is to balance the central control of the multisite implementation with the unique requirements desired by each of the sites. The competing interests of the individual sites against the other sites as well as the total organization are forces at work with respect to the collective interest of the organization’s ERP. The study seeks to gain insights into the dynamics of a multisite organizational ERP implementation by analyzing the motivations and challenges in the interactive relationship. The grounded theory approach is utilized in analyzing the data from this research to gain a deeper understanding of the underpinnings of the organization in relationship to its ERP system. This research examines the case of a multisite ERP system at the University of Nebraska where four campuses or sites are involved (i.e., University of Nebraska at Kearney, University of Nebraska-Lincoln, University of Nebraska at Omaha, and iii University of Nebraska Medical Center). The scenario represented by this organization provides a multi-location example for understanding the ERP relationship challenges. The investigation will provide proposed guidelines and suggestions for organizations facing similar dynamic ERP issues. Through the search for an understanding of the dialectic relationship between a central governing body and the sites, nine dialectic forces in a multisite ERP system have been identified by this research. Three of them are bureaucracy, goal communication, and leadership by central governing body. The other six forces are goal alignment, solution frustration, size inequivalence among the sites, unique business models of sites, adequacy of communication, and site independence. These dialectic forces create challenges in managing multisite ERP implementations.

Advisor: Fiona Fui-Hoon Nah

The Portrayals of Family in Advertising: Children's Perspectives

Elise J. Johansen — Mon, 30 Jul 2012 08:38:29 PDT

Children are exposed to over 25,000 advertisements each year just on television. Research has demonstrated advertising’s effect on children’s preferences and perceptions including gender roles. With the changing structure of family now including diverse family types such as same-sex parents, childfree couples, single-persons, and transracial adoptive families, we do not yet know if advertising is changing with the times and how children perceive these family groups. This study seeks to determine how children perceive family in advertising and its effect on their concept of family through a content analysis of children’s television advertisements and data collection from children in the Midwest. While family is not a prevalent theme within children’s advertising, is it present. Images may suggest a nontraditional household, but no concrete clues substantiate the suggestion. Age was found to be a significant predictor of identifying nontraditional groups as families, but gender influenced affect to a greater extent.

Advisor: James W. Gentry

International Knowledge Flows and Technological Advance: The Role of International Migration

Kacey N. Douglas — Mon, 30 Jul 2012 08:09:58 PDT

Immigration is a major aspect of globalization. As the world becomes increasingly integrated, it becomes important to learn more about the effects of immigration on global economic growth. According to Robert Solow’s long run growth model, technological advance is the only form of economic growth sustainable in the long run. Those who contribute to technological advance – highly skilled labor – however, increasingly emigrate from lesser developed to more developed countries in a process known as brain drain. This process has been shown to lead to a permanent increase in income and growth in the host country relative to the source country. This paper investigates whether brain drain migration can lead to technological advance in the source country. More specifically, do migration flows to the United States (US) lead to knowledge from the US?

To answer this empirically, I use a proxy for technology flows and regress it on immigration and other control variables. Technology flows are measured as the number of forward citations a US patent receives from inventors in a given sample country during a given year. The sample contains thirteen countries over the years 1995-2010. Given the characteristics of the data, a fixed-effects Poisson distribution model was applied to conduct the regression analysis.

The immigration was found to be positive and statistically significantly related to technology flows. The result is fairly robust for different regression specifications; all but one model show that the effect of immigration is statistically significant and all of the models show the effect to be positive. These results support the hypothesis that brain drain migration leads to technology flows back to the source country. Although my sample countries are considered economically developed, there is evidence to suggest they too suffer from brain drain migration to the US. Thus, the results found are significant and relevant for the sample countries analyzed in the paper.

Advisor: Hendrik van den Berg

Impact of Business Intelligence and IT Infrastructure Flexibility on Competitive Advantage: An Organizational Agility Perspective

Xiaofeng Chen — Fri, 27 Jul 2012 08:20:54 PDT

There is growing use of business intelligence (BI) for better management decisions in industry. However, empirical studies on BI are still scarce in academic research. This research investigates BI from an organizational agility perspective. Organizational agility is the ability to sense and respond to market opportunities and threats with speed, and BI can help in the sensing role of organizational agility. Drawing on the systems theory, dynamic capabilities framework, and literature on competitive advantage, organizational agility, business intelligence, and IT infrastructure flexibility, we hypothesize that BI use and IT infrastructure flexibility are major sources of organizational agility. We developed a research model to examine the effects of BI and IT infrastructure flexibility on organizational agility. This model also examines how organizational agility mediates the effects of BI and IT infrastructure flexibility on an organization’s competitive advantage. Survey data were collected and used to assess the model. The results support the hypothesis that BI and IT infrastructure flexibility are significant sources of organizational agility, and organizational agility partially mediates the effects of BI and IT infrastructure flexibility on an organization’s competitive advantage. This research is a pioneer work that empirically investigates the significance of BI in the business context. It also demonstrates from the organizational agility perspective that information technology and systems have strategic values for organizations, as they are significant sources of organizational agilities and competitive advantages.

Advisor: Keng L. Siau

The Role of Interactivity in Interent Business on Customer Experiential Values and Behavioral Intentions

So Ra Park — Thu, 26 Jul 2012 06:15:40 PDT

Customers’ experiential value is based on holistic experience customers would have when they interact with a product/service. Experiential value is defined as “relativistic preference characterizing a subject’s experience with some object” (Holbrook, 1994). Internet is characterized for interactivity and it should have a role in customers’ experiential value. Therefore, this research investigates the role of interactivity (e-store interaction, C2C interaction, and content interaction) and web store utility on intrinsic and extrinsic customer experiential value. The final dependent variable is behavioral intentions. To test the research model, a survey was designed to capture online consumers’ perception of interactivity within e-stores, experiential value, and behavioral intentions. The survey was conducted in South Korea due to its advancement in e-commerce (Reuter, 2010) and 354 usable responses were gathered. 98% of the respondents had experience in online purchasing showing the maturity of e-commerce in South Korea. SPSS 18.0 and AMOS 18.0 were used to analyze for reliability, validity, model fits and SEM. The result showed strong influence of e-store interaction, C2C interaction, and content interaction on intrinsic customer experiential value. Content interaction and web store utility had positive relationships with extrinsic customer experiential value. Intrinsic customer experiential value, extrinsic customer experiential value, and web store utility had positive relationships with behavioral intentions. However, e-store interaction and C2C interaction did not have any relationship with extrinsic customer experiential value. Also, there was no influence found between web store utility and intrinsic customer experiential value.

Advisor: Sang M. Lee & David L. Olson

Essays in inflation and monetary dynamics in developing countries

Simon K. Harvey — Tue, 24 Jul 2012 07:52:34 PDT

This dissertation is consists of three essays. In the first essay, I analyze how the information contained in the disaggregate components of aggregate inflation helps improve the forecasts of the aggregate series using inflation data from Ghana. Direct univariate forecasting of the aggregate inflation data by an autoregressive (AR) model is used as the benchmark with which all autoregressive (AR), moving average (MA) and vector autoregressive (VAR) models of the disaggregates are compared. The results show that directly forecasting the aggregate series from the benchmark model is generally superior to aggregating forecasts from the disaggregate components. Additionally, including information from the disaggregates in the aggregate model rather than aggregating forecasts from the disaggregates performs best in all forecast horizons when appropriate disaggregates are used. The implication of these results is that better inflation forecasts for Ghana are produce by using information from relevant disaggregates in the aggregate model rather than direct forecasts of the aggregate or aggregating forecasts from the disaggregates.

In the second essay, I use a structural vector autoregression (SVAR) to model inflation so as to identify the relative importance of shocks to real output growth, monetary growth and exchange rate depreciation in inflation dynamics in Ghana. The results show that neither monetary growth alone nor structural factors alone explain the inflation experience in Ghana and that the structural factors dominate monetary growth in the inflation dynamics. There is a fairly strong feedback between inflation and exchange rate depreciation both of which have weak relationship with monetary growth. These suggest that policies that boost domestic supply and therefore reduce import demand will be more potent than direct monetary management to curb inflation in Ghana.

Finally, in the third essay, I the test whether the West African Monetary Zone (WAMZ) is a common currency area by using a vector autoregressive model to study the variance decomposition, impulse responses of key economic variables and linear dependence of the underlying structural shocks of the countries in the zone. The variance decomposition shows that the zone a whole does not have common sources of shock, which is expected because of the diverse economic structures of these countries. The correlation of the structural shocks also shows that these countries respond asymmetrically to common supply, demand and monetary shocks and will therefore respond differently to a common monetary policy. It is therefore not in the interest of the individual countries to go into a monetary union now or in the near future unless the economies of these countries converge further.

Advisor: Matthew J. Cushing

OWNERSHIP STRUCTURE, ABSORPTIVE CAPACITY, AND INNOVATION: PLANTING VS HARVESTING INNOVATION

Seung Hoon Jang — Mon, 23 Jul 2012 06:18:11 PDT

This dissertation investigates the main research question: Which classification of innovation explains the heterogeneous timing of revenue realization? Given the significance of financial gain, researchers are recommended to pay attention to whether innovation outcomes result in commercial gains in the short term. Following this notion, a new category of innovation, planting and harvesting, is presented. While harvesting innovation seeks new resources in the expectation of commercial performance in the short term, planting innovation pursues potential resources creating value over a long time period. The interest in the determinants and financial contribution of these types of innovation leads to the second research question: How do planting and harvesting innovation interact with other factors and firm performance? The need to understand innovation practices results in the third research question: How are planting and harvesting innovation implemented in a real business?

Both quantitative and qualitative analyses are performed to answer these questions. Quantitative analysis examines the second research question. Based on the literature review, the relationships between ownership structure, absorptive capacity, harvesting and planting innovation, and firm performance were hypothesized. To verify these hypotheses, the financial data of high-tech small and medium-sized companies listed in Korean Stock Exchange (KSE) were analyzed through path analysis and cross-lagged analysis. Qualitative analysis was implemented to investigate the third research question. For this purpose, the case of Samsung Electronics (SE) is examined.

In this study, several meaningful implications are provided. The new distinction of innovation is provided to fill the gap in innovation studies. The combination of Partial Least Square (PLS) analysis and cross-lagged analysis enabled the researcher to implement a longitudinal exploratory study with a small sample. In addition, the collection of interviews from new articles made it possible to observe the opinions of a number of executives for a long period of time. Practitioners are recommended to share investment risk to implement planting innovation. In addition, co-innovation is shown to maintain ambidexterity by implementing convergence, collaboration, and co-creation.

Advisor: Sang M. Lee and Marc J. Schniederjans

SENTIMENT ANALYSIS: A STUDY ON PRODUCT FEATURES

Yanyan Meng — Tue, 01 May 2012 12:15:43 PDT

Sentiment analysis is a technique to classify people’s opinions in product reviews, blogs or social networks. It has different usages and has received much attention from researchers and practitioners lately. In this study, we are interested in product feature based sentiment analysis. In other words, we are more interested in identifying the opinion polarities (positive, neutral or negative) expressed on product features than in identifying the opinion polarities of reviews or sentences. This is termed as the product feature based sentiment analysis. Several studies have applied unsupervised learning to calculate sentiment scores of product features. Although many studies used supervised learning in document-level or sentence-level sentiment analysis, we did not come across any study that employed supervised learning to product feature based sentiment analysis. In this research, we investigated unsupervised and supervised learning by incorporating linguistic rules and constraints that could improve the performance of calculations and classifications. In the unsupervised learning, sentiment scores of product features were calculated by aggregating opinion polarities of opinion words that were around the product features. In the supervised learning, feature spaces that contained right features for product feature based sentiment analysis were constructed. To reduce the dimensions of feature spaces, feature selection methods, Information Gain (IG) and Mutual Information (MI), were applied and compared. The results show that (i) product features
were good indicators in determining the polarity classifications of document or sentences; (ii) rule based features could perform well in supervised learning e; and (iii) IG performed better in document analysis, while MI performed better in sentence-level analysis.

Advisor: Keng L. Siau

Critical Success Factors of Location-Based Services

Natalie Jun Pei Chin — Mon, 23 Apr 2012 14:12:59 PDT

Location-based services evolved with the advancement in mobile technology and wireless technology. Researchers have studied location-based services in terms of privacy, trust, and user acceptance. Statistics suggest the percentage of location-based services users is still relatively low. Therefore, the main objective of this study was to gain a comprehensive and holistic understanding of the critical success factors of location-based services. The electronic brainstorming approach was used to gather the opinions of an expert group of practitioners, researchers, and users on the critical success factors of location-based services. Through grouping similar factors together based on past literature, 15 categories of critical success factors were developed. These 15 categories were ranked and rated according to importance. The results showed that speed, real-time or up-to-date information, cost, usefulness or benefits, and simple or ease of use are the five most important critical success factors. The results of this research highlight potential areas of research, and research and development. The results of this study also provide guidelines for practitioners to create a competitive location-based services strategy to increase consumer adoption.

Advisor: Keng L. Siau

World Food Crisis: Imperfect Markets Starving Development, A Decomposition of Recent Food Price Increases

Christine Costello — Fri, 02 Dec 2011 07:28:29 PST

The recent decade has experienced two rather substantial food price spikes. This thesis sets out to provide an in-depth look at the recent food price increases by achieving two goals: assessing the forces driving food prices, and determining the magnitude of those forces. These goals are reached by reviewing selected rhetoric on the recent food price increases, analyzing case studies, and lastly determining our modeling capabilities in decomposing food price changes. Additionally, this thesis will serve as a tool for stakeholder's to better address critical policy issues surrounding food, agriculture, and energy policies.

Adviser: Hendrik Van Den Berg

The Effect of Tax Increment Financing on Spillovers and School District Revenue

Jennifer A. Bossard — Tue, 09 Aug 2011 15:42:19 PDT

Over the years the urban development financing tool known as Tax Increment Finance (TIF) has been a controversial topic as it relates to fiscal impacts on school districts. This study addresses an important question related to this issue. Does TIF affect non-TIF district property value within the school district? The question is explored by developing a theoretical model that describes the relationship between TIF and school finance and estimating an empirical model that tests the hypotheses stemming from the theoretical model. Although the results are mixed, there is some evidence that TIF does affect non-TIF district property value in the school district.

The theoretical model describes the spillover effect of TIF on non-TIF district property values, permitting non-linear spillover effects on the growth rate of non-TIF district property values. Testable hypotheses that flow from this model indicate that at lower levels of TIF intensity the spillover effect is positive, but at higher levels the spillover effect is negative. This theoretical result leads to exploration of the optimal TIF intensity that maximizes the positive spillover effect.

Using data from Minnesota school districts for the years 1992 through 2007, I estimate the relationship between non-TIF district property value growth for school districts and a measure of TIF intensity. Five regressions have statistically significant results supporting the theoretical model’s testable hypotheses. Using the coefficient estimates from estimated equations, the optimal TIF intensity was 21 percent in 1993, 15 percent in 1996, 10 percent in 2000, eight percent in 2002, and six percent in 2003. These results indicate that over time the optimal TIF intensity decreased. Consequently, TIF positive spillover effects appear to have dissipated over time. The actual average TIF intensity of the school districts over these years was generally well below the estimated optimal values and has been decreasing over time. Based on average TIF intensities, it appears that during these years most school districts in Minnesota have benefited from positive spillover effects on non-TIF district property value.

TEAM COLLABORATION IN VIRTUAL WORLDS: THE ROLE OF TASK COMPLEXITY

Parichart Sattayanuwat — Mon, 08 Aug 2011 07:24:45 PDT

Virtual worlds are three-dimensional, computer-generated worlds where team collaboration can be facilitated through the use of shared virtual space and mediated using avatars. In this study, we examined the effect of task complexity on team collaboration. We used a puzzle game in Second Life as the collaborative task and manipulated task component complexity by varying the number of pieces in the puzzle. We hypothesized that task complexity would influence team trust, team process satisfaction, and one‘s attraction to the team in virtual team collaboration. The experimental results indicate that task complexity has significant effects on team trust and team process satisfaction.

A Longitudinal Examination of the Relationship between Corporate Financial Performance and the Corporate Persona Revealed in the Annual Report

Samuel A. Nelson — Fri, 15 Jul 2011 14:43:17 PDT

This research examines the relationship between organizational financial performance and the levels of charisma and optimism revealed in the annual report. Hypotheses were developed based on the meta-theory of the organization as a social actor and previous empirical results regarding the relationship between organizational financial performance and the constructs of charisma and optimism. Based on previous research it was hypothesized that organizational financial performance would be positively related to charisma and optimism at the within-firm and between-firm levels of analysis. A content analysis of annual reports was performed and financial performance was collected for each company in the study for the years 2001-2010. The data was analyzed utilizing hierarchical linear modeling (HLM) in SAS 9.2 to test the hypotheses. The annual reports were analyzed utilizing the DICTION 5.0 software package and an optimism and charisma score were generated for each company. The sample for the study were all companies within the restaurant and petroleum industries traded on the New York Stock Exchange (NYSE) that had available data for the years 2001-2010. The control variables employed in the study were company size and research and development (R&D) intensity. In addition, industry membership was treated as a moderating variable. The findings indicate that on average a firm will demonstrate higher levels of optimism when its financial performance is significantly higher than its baseline level of financial performance. In addition, on average, the restaurant industry demonstrated higher levels of charisma and optimism than the petroleum industry. The implications of these findings and the directions for future research regarding the organization as a social actor are discussed.

Advisor: Lester Digman

INTERORGANIZATIONAL KNOWLEDGE TRANSFER THROUGH CORPORATE VENTURE INVESTMENT

Taewan Kim — Fri, 15 Jul 2011 14:06:57 PDT

A single research question motivated this dissertation: How does corporate venture capital investment by a parent firm affect knowledge transfer from the start-up? In answering this question I employed two theoretical foundations. First, drawing on the concept of distant search, I argue that search for external knowledge through CVC investment provides a parent firm with an opportunity to source external knowledge from the start-up. Second, building upon literature on knowledge transfer, I suggest that types of CVC structure facilitate external knowledge transferred from the start-up to a parent firm. Finally, I posit that knowledge attribute of the parent firm improves the parent firm’s ability to source external knowledge from the start-up. Three hypotheses are developed to test these relationships.

Longitudinal data on a panel of 29 large firms in the information communication technology industry covering the period from 1995 to 2005 are used to test these hypotheses. Patent citation is used to measure the level of knowledge transferred from an entrepreneurial firm to a parent firm. Taken together, statistical results of this research provide evidence that the number of CVC investments has an inverted U-shaped relationship with the level of knowledge transferred from the start-up. Both the CVC structure and technological diversity of the parent firm have moderating effects on the relationship between the number of CVC investments and the level of knowledge transferred from the start-up.

Adviser: Sang M. Lee

BECOMING A FIRM: AN INVESTIGATION OF HOW ONE-PERSON ENTERPRISES CONSTRUCT THE PROBLEM OF BECOMING AN EMPLOYER

Ronda M. Smith Nelson — Thu, 21 Apr 2011 12:16:31 PDT

This study draws on Coase’s (1937) Theory of the Firm, that suggests a firm exists only after it has employees and Penrose’s (1959) Theory of the Growth of the Firm which suggests human resources are a critical asset to the firm as a means to better understand the issue of job creation in the United States especially among one-person enterprises (OPEs). From the perspective of entrepreneurial cognition, and in the context of ill-defined problems (Abelson & Levi.1985) a survey was conducted to better understand the Becoming an Employer Problem (BEP) as it is perceived by OPEs. A measure of the BEP was developed and antecedents consistent with factors known to be associated with how problems are constructed in general (Reiter-Palmon & Robinson, 2009) was tested. Results suggest 3 main classes of problems associated with BEP: concerns related to administrative and legal, recruitment and selection, and regarding the OPE’s management abilities and preferences. The findings suggest that OPEs (n=100) who are older, married, have completed a business plan for their business, and have a promotion orientation towards goals will perceive less problems associated with becoming an employer, whereas those who have more expertise in the functional areas of business are likely to perceive more problems associated with BEP. These effects are significant after controlling for gender, minority status, operating state, type of business, and whether or not the entrepreneur has previously hired employees. Implications and opportunities for future research are discussed.

Advisor: Terrence C. Sebora

Three Essays on FDI in China

Mingming Pan — Thu, 21 Apr 2011 12:14:48 PDT

Foreign Direct Investment (FDI) has contributed a great deal to China’s extraordinary growth by injecting capital into the economy, creating jobs, transferring technology and knowledge, enhancing trade, bringing in competition for local enterprises, improving the quality of local labor and intermediate goods suppliers, and connecting China’s gradually opening economy to the global market. For over a decade, China has been the second largest recipient of inward FDI in the world behind the United States. In 2009, China received $95 billion, which is 8.5% of the world’s total. However, the large amount of inward FDI has been unevenly distributed across Chinese provinces, with around 80% annual inward FDI flowing into the coastal region of China. Central authorities of China have been making efforts in directing FDI from the eastern coast to farther inland.

This dissertation analyzes the regional determinants of FDI inflows into Chinese provinces and intends to fill certain gaps in the literature and provide new directions in this strand of research.

After the introductory chapter that provides a general overview of FDI inflows in China, three self-contained essays follow. The first essay analyzes the changing agglomeration effect of FDI in China. Empirical evidence supports a weakening agglomeration effect of FDI over the years, and it suggests that at present FDI is not agglomerating. In addition, this research empirically points out the changing relative importance in market size as an FDI determinant over the years.

The aims of the second essay are to examine the interdependence of Chinese provinces and to provide empirical evidence for the recent general equilibrium theory of multinational enterprises. Using two spatial models, I find that despite the competing pattern of FDI across provinces, not all surrounding provinces’ endowments display competing effects. Actually some surrounding provinces’ endowments have complementary effects. Evidence suggests that Export-Platform and Pure-Vertical forms of FDI dominate the aggregate FDI inflows into China.

As some past studies have shown concerns regarding the feedback of FDI on GDP and the wage rate, the third essay constructs a simultaneous equations model to further explore this issue. Above all, the empirical results relieve our worry about the simultaneity problem, since FDI has delayed effects on both GDP and the wage rate.

Adviser: Hendrik Van den Berg

Industrial Diversity and Economic Performance: A Spatial Analysis

Hoa Phu Duy Tran — Wed, 13 Apr 2011 08:03:56 PDT

This study examines the linkage between industrial diversity and economic growth in the 48 contiguous states of the United States. The period of analysis is 1992 through 2009. Five diversity indices are considered and economic growth is measured as the growth rate of nonfarm earnings. Other variables thought to influence economic growth are included in the analysis. They are the growth rate of nonfarm employment, capital, and farm earnings. Tests for the endogeneity of variables are conducted and the need for instrumental variable estimation methods is demonstrated.

First, I consider multivariate model that relates nonfarm earnings growth to the diversity indices and the other variables noted above. The model includes regional fixed effects and time effects but does not allow for spatial dependence among states. The results show that diversity positively influences economic growth. Growth in nonfarm employment and capital are also found to be positively influence economic growth.

Second, I consider two spatial models that allow for a spatial lag and spatial autocorrelation effects among states. The first spatial model assumes a common spatial lag parameter for all states. The second spatial model allows the spatial lag parameter to be unique for each of eight regions within the United States. Two estimation methods are used, the generalized spatial two-state least squares estimator and an instrumental variables estimator along with a spatial heteroskedasticity and autocorrelation consistent matrix estimator.

The spatial lag parameter is small and statistically insignificant when the parameter is assumed to be the same across regions. However, when the spatial lag parameter is allowed to vary across regions, spatial effects among states are detected and are reasonably strong in some regions. Under both estimation methods for both spatial models, the results provide strong evidence that states with higher levels of diversity experience higher growth rates in nonfarm earnings. Nonfarm employment growth and capital growth are also significant influences upon the growth rate of nonfarm earnings.